No sooner than it has started, thelawsuit filed against New Line Studios by the estate of J. R. R. Tolkien over profits due from the adaptation of the late author’s classic Lord Of The Rings is over. Variety reports that the parties have reached a settlement, though the termsof which have not been revealed.
The Tolkien estate had filed the suit back in February, alleging that they were still due $220 million in profit sharing from the nearly $6 billion that the three Lord Of The Rings films have brought in through theatrical exhibition and home video. The suit also requests that the film rights revert back to the Tolkien estate as New Line’s lack of payment constitutes a breach of contract, thus putting the future of directors Peter Jackson and Guillermo Del Toro’s planned two-film adaptation of Tolkien’s The Hobbit set to begin filming early next year at risk.The case had been scheduled to go to trial in mid-October.
It’s not surprising that New Line reached an out-of-court deal with the Tolkien estate, which uses the continuing profits from the author’s work for various charitable endeavors. As we all know, studio accounting is its own strange branch of mathematics, where normal laws don’t seem to apply and where films that may have made hundreds of millions of dollars at the box office still manage not to turn a profit. The Tolkien suit threatened to expose such dirty practices.
What is surprising is that this is the third law suit brought against New Line in relation to the Lord Of The Rings. In 2005, they had to pay out $168 million to former Rings film rights holder Saul Zaentz and in 2007 they reached an undisclosed settlement with Jackson over his share of the profits from the trilogy.
Hopefully, as production is now clear to roll forward on The Hobbit, perhaps New Line will act a bit more honorably to all participants in the future. But then again, this is Hollywood…